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Informist, Tuesday, Nov. 12, 2024

MUMBAI – Government bond prices and overnight indexed swap rates, on Wednesday, may take cues from the overnight movement in the US Treasury yields ahead of the US CPI data for October, due post market hours, dealers said. Dow Jones projects the figure higher than 2.4% in September due to an unfavourable base effect. 

Commentary from US Federal Reserve Bank of Philadelphia President Patrick Harker Wednesday and US Fed Chair Jerome Powell Thursday may also guide the US interest rate view, impacting gilt prices and OIS rates, dealers said. A movement in crude oil prices may also lend cues. 

On Wednesday, the one-day call money rate may open around the Reserve Bank of India's repo rate of 6.50% because of the demand for funds from banks in early trade for reserve requirements.

GOVT BONDS

On Wednesday, prices of government bonds are seen taking cues from the overnight movement in the US yields and crude oil, dealers said. US CPI data for October, due post market hours Wednesday, may cause some volatility in US yield movement.

The yield on the 10-year benchmark 7.10%, 2034 bond is seen at 6.80-6.86%. The yield on the 6.79%, 2034 bond is seen at 6.77-6.83%. On Tuesday, the 7.10%, 2034 bond closed at INR 101.85, or 6.83% yield, and the 6.79%, 2034 bond ended at INR 99.95, or 6.80% yield.

OIS RATES

On Wednesday, swap rates may open steady on caution ahead of US CPI data, due post market hours. The movement of US Treasury yields and crude oil prices will also be closely watched, dealers said.

The swap rate in the one-year segment is seen at 6.43-6.60% and in the five-year segment at 6.20-6.40%. On Tuesday, the one-year swap rate closed at 6.54% and the five-year swap closed at 6.27%. 

CALL

On Wednesday, the one-day call money rate may open around the RBI's repo rate of 6.50% because of demand for funds from banks in early trade for reserve requirements. During the day, the call rate is seen in a range of 6.00-6.60%, dealers said. On Tuesday, the one-day call rate ended at 5.75%.

RBI AUCTION

--RBI to hold INR 500 bln overnight VRRR

--RBI to auction 91-day T-bills worth INR 70 bln

--RBI to auction 182-day T-bills worth INR 60 bln

--RBI to auction 364-day T-bills worth INR 60 bln

LIQUIDITY

--Total net outflows of INR 9.19 billion. Calculation of flows does not take into account redemption of the standing deposit facility and scheduled variable rate repo and reverse repo.

* Inflows

--INR 9.88 billion as coupon on state bonds

--INR 7.50 billion on redemption of state bonds 

--INR 1.81 billion as coupon on 7.25%, 2028 green bond

--INR 25.62 billion as coupon on 7.32%, 2030 gilt

* Outflows

--INR 54.00 billion as payment on state bonds

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Cassandra Carvalho

Edited by Akul Nishant Akhoury

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